The agency is also citing a commitment by the bailed out country's conservative-led government to improve public finances.

In an announcement late Friday, the agency said it had raised the Greek rating by two notches from Caa3 to Caa1 — still below investment grade.

Greece is set to emerge from recession this year for the first time since 2008. The country was rescued from the brink of bankruptcy in 2010 by an international bailout that was eventually worth 230 billion euros ($308 billion).

But rescue creditors from other eurozone countries and the International Monetary Fund forced the country to make drastic spending cuts that have seen levels of poverty and unemployment soar.